Slide 1: Tapestry
tapestry COACH | kate spade | STUART WEITZMAN
Slide 2: Forward-looking statements
This presentation contains certain “forward-looking statements” based on management’s current expectations. Forward-looking statements include, but are not limited to, the information provided on the slide entitled “Fiscal 2019 Outlook”, as well as statements which can be identified by the use of fo
Slide 3: Global house of brands defined by inclusivity
DEFINED BY INCLUSIVITY RATHER THAN EXCLUSIVITY, we are a global house of brands that embraces the exploration of individuality. We believe that true luxury is a freedom of expression that ignites confidence and authenticity. Approachable and inviting, we celebrate brands that create joy every day fo
Slide 4: CEO quote: a different kind of company
“We’re a different kind of company. We have a collection of brands that have very specific and unique identities. All of our brands are based on great design, quality and craftsmanship. At the end of the day, all of our teams are focused on providing tremendous value for customers.” VICTOR LUIS, CEO
Slide 5: Optimistic, Innovative, Inclusive
OPTIMISTIC INNOVATIVE INCLUSIVE
Slide 6: Leadership Team
LEADERSHIP TEAM Victor Luis Chief Executive Officer Joshua Schulman Anna Bakst Eraldo Poletto CEO and Brand President, CEO and Brand President, CEO and Brand President, Coach Kate Spade Stuart Weitzman Todd Kahn Andrea Shaw Resnick Zeynep Schoenwaelder President, Chief Administrative Officer Global
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Slide 8: Fiscal 2019 Strategic Priorities
FISCAL 2019 STRATEGIC PRIORITIES FOCUS ON execution HARNESS the FUEL DRIVE INVEST in POWER of BRAND GLOBAL DIGITAL & MULTIBRAND INNOVATION GROWTH DATA • Capture full benefit of • Accelerate product • Maximize the • Develop industry- multi-brand structure newness across opportunity with the leading c
Slide 9: FY19 Second Quarter Results
FY19 SECOND QUARTER RESULTS Delivered growth in sales and gross profit at Tapestry, successfully anniversarying the strong holiday results of the prior year. Drove continued positive global comparable store sales at Coach led by international markets and e-commerce platforms. Experienced softness in
Slide 10: FY19 Second Quarter: Financial Overview
FY19 SECOND QUARTER: FINANCIAL OVERVIEW DELIVERED TOPLINE GROWTH AND EXPECTED SYNERGIES, WHILE MAKING STRATEGIC BRAND AND COMPANY INVESTMENTS 2Q18 2Q19 GROWTH revenue $1.79B $1.80B +1% operating income $411M $402M -2% earnings per diluted share $1.07 $1.07 +0% Note: Non-GAAP Financials. Non-GAAP rec
Slide 11: FY19 First Half: Financial Overview
FY19 FIRST HALF: FINANCIAL OVERVIEW DELIVERED TOPLINE GROWTH AND EXPECTED SYNERGIES, WHILE MAKING STRATEGIC BRAND AND COMPANY INVESTMENTS 1H18 1H19 GROWTH revenue $3.07B $3.18B +4% operating income $580M $583M +1% earnings per diluted share $1.49 $1.55 +4% Note: Non-GAAP Financials. Non-GAAP reconci
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Slide 13: Fiscal 2018 Milestones
FISCAL 2018 MILESTONES Successfully completed the acquisition of Kate Spade and evolved into a true house of brands, establishing Tapestry as our new corporate identity. Strengthened our executive and creative leadership across our brands with a clear focus on executing our strategic vision. Brought
Slide 14: FY18 Financial Overview: Revenue
FY18 FINANCIAL OVERVIEW: REVENUE STRONG RESULTS DRIVEN BY KATE SPADE ACQUISITION AND ORGANIC GROWTH FY18 FY17 SW Kate 8% +31% Spade 22% GROWTH SW $5.9B $4.5B 6% Coach Coach 92% 72% 14
Slide 15: FY18 Financial Overview: Operating Income
FY18 FINANCIAL OVERVIEW: OPERATING INCOME STRONG RESULTS DRIVEN BY KATE SPADE ACQUISITION AND ORGANIC GROWTH FY17 FY18 GROWTH $813M $992M +22% Note: Non-GAAP Financials. Non-GAAP reconciliation in Appendix. 15
Slide 16: FY18 Financial Overview: Earnings Per Diluted Share
FY18 FINANCIAL OVERVIEW: EARNINGS PER DILUTED SHARE STRONG RESULTS DRIVEN BY KATE SPADE ACQUISITION AND ORGANIC GROWTH FY17 FY18 GROWTH $2.15 $2.63 +22% Note: Non-GAAP Financials. Non-GAAP reconciliation in Appendix. 16
Slide 17: Opportunity in the global premium handbag and accessories market
OPPORTUNITY ACROSS BRANDS IN THE ATTRACTIVE AND GROWING GLOBAL PREMIUM HANDBAG AND ACCESSORIES, FOOTWEAR AND OUTERWEAR MARKET FY18 FY17 Outerwear Outerwear $12B $11B +7% GROWTH Handbag & Handbag & Footwear Footwear $83B Accessories $91B Accessories $28B $31B $43B $48B Source: Tapestry Global Market
Slide 18: ~70 Countries, 6 Continents
~70 COUNTRIES 6 CONTINENTS As of FY18. 18
Slide 19: 1,400+ Directly Operated Locations
1,400+ DIRECTLY OPERATED LOCATIONS As of FY18. 19
Slide 20: Overview
OVERVIEW by
Slide 21: Coach
®.. ‘ Ol 4 KR MD COACH NEW YORK
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Slide 23: Coach CEO quote
“For over 75 years, Coach has been part of the American landscape. As we write our next chapter, we’re building on our heritage of craftsmanship and confident New York style to deliver a complete lifestyle brand for modern lives.” JOSHUA SCHULMAN, CEO & BRAND PRESIDENT, COACH 23 23
Slide 24: Coach Our Vision
OUR VISION Coach inspires the dreamer in all of us, connecting our modern lives with the spirit of the open road. 24
Slide 25: Coach key facts: annual revenue, stores, employees
$4.22B ANNUAL REVENUE 987 DIRECTLY OPERATED STORES 13,500 EMPLOYEES As of FY18. 25
Slide 26: Coach Fiscal 2018 Milestones
COACH FISCAL 2018 MILESTONES Successfully reinvigorated the $300-$400 handbag price segment. Stuart Vevers created new expression of Signature and the customer immediately embraced his iteration of this brand icon. Grew categories outside of Women’s bags and small leathergoods– notably footwear, rea
Slide 27: Coach Product & Geographic Breakdown
COACH PRODUCT & GEOGRAPHIC BREAKDOWN DIVERSIFIED ACROSS PRODUCT CATEGORIES AND GEOGRAPHIES Other Lifestyle Categories 8% Men's International 20% Women's 43% Handbags North 54% America 57% Women's Accessories 18% As of FY18. 27
Slide 28: Coach Fiscal 2019 Strategic Priorities
COACH FISCAL 2019 STRATEGIC PRIORITIES BALANCE FASHION FUEL DIGITAL CASCADE DRIVE GROWTH MODERNIZE, AUTHORITY & INNOVATION & LEATHERGOODS BEYOND CUSTOMIZE & UNIVERSAL ECOMMERCE INNOVATION BAGS PERSONALIZE APPEAL IN GROWTH MARKETING 28
Slide 29: Kate Spade New York
& kate spade NEW YORK
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Slide 31: Kate Spade CEO quote
“Kate Spade has tremendous opportunity across product categories, channels and geographies. We are leveraging the brand’s global potential, bringing its unique and empowering feminine positioning to women around the world.” ANNA BAKST, CEO & BRAND PRESIDENT, KATE SPADE 31 31
Slide 32: Kate Spade Our Vision
OUR VISION A globally admired aspirational life & style brand, delivering brand-enhancing profitable growth, where people — our customers and teams — are at the center of everything we do. 32
Slide 33: Kate Spade key facts: annual revenue, stores, employees
$1.28B ANNUAL REVENUE 342 DIRECTLY OPERATED STORES 5,500 EMPLOYEES As of FY18. 33
Slide 34: Kate Spade Fiscal 2018 Milestones
KATE SPADE FISCAL 2018 MILESTONES Built the foundation to support global growth with significant progress integrating the brand onto the Tapestry platform. Executed strategies to ensure long-term brand relevance, including the deliberate pullback in promotional flash and disposition sales. Strengthe
Slide 35: Kate Spade Product & Geographic Breakdown
KATE SPADE PRODUCT & GEOGRAPHIC BREAKDOWN OPPORTUNITY TO EXPAND INTERNATIONALLY AND DEVELOP CLEAR GLOBAL POSITIONING OTHER INTERNATIONAL LIFESTYLE 17% CATEGORIES 24% WOMEN'S HANDBAGS 55% WOMEN'S ACCESSORIES NORTH 21% AMERICA 83% As of FY18. 35
Slide 36: Kate Spade Fiscal 2019 Strategic Priorities
KATE SPADE FISCAL 2019 STRATEGIC PRIORITIES EXPAND INTRODUCE LAUNCH CREATE LEVERAGE GLOBALLY: EXCEPTIONAL LIFESTYLE- IMMERSIVE TAPESTRY THINK GLOBAL, AND INSPIRING FOCUSED CHANNEL PLATFORM ACT LOCAL PRODUCTS BRANDING EXPERIENCES 36 36
Slide 37: Stuart Weitzman
STUART WEITZMAN
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Slide 39: Stuart Weitzman CEO quote
“Stuart Weitzman footwear has long represented quality, style and the beautiful combination of form and fit. We are building on this foundation as we evolve into a global, multi-channel and multi-category fashion brand.” ERALDO POLETTO, CEO & BRAND PRESIDENT, STUART WEITZMAN 39 39
Slide 40: Stuart Weitzman Our Vision
OUR VISION STUART WEITZMAN IS ON A JOURNEY TO EVOLVE INTO A GLOBAL MULTI-CATEGORY ACCESSORIES BRAND. LOOKING FORWARD, THE BRAND WILL PRODUCE INNOVATIVE ACCESSORIES BASED ON A FOUNDATION OF WARDROBE ESSENTIALS THAT FOSTER AN EMOTIONAL CONNECTION WITH WOMEN OF ALL AGES. THE GOAL IS TO ESTABLISH STUART
Slide 41: Stuart Weitzman key facts: annual revenue, stores, employees
$374M ANNUAL REVENUE 103 DIRECTLY OPERATED STORES 940 EMPLOYEES As of FY18. 41
Slide 42: Stuart Weitzman Fiscal 2018 Milestones
STUART WEITZMAN FISCAL 2018 MILESTONES ACQUIRED STUART WEITZMAN NORTHERN CHINA BUSINESS FROM DISTRIBUTOR PARTNER. APPOINTED ERALDO POLETTO, CEO & BRAND PRESIDENT, EDMUNDO CASTILLO, HEAD OF PRODUCT DESIGN, AND FRANCESCA BERTONCINI, HEAD MERCHANT, TO EXECUTE THE LONG-TERM VISION. GAINED TRACTION IN EV
Slide 43: Stuart Weitzman Fiscal Strategic Pillars
S T U A RT W E I T Z M A N F I S C A L 2 0 1 9 S T R AT E G I C P I L L A R S MAINTAIN DRIVE BOOT & SANDAL GROW BEYOND RESET EXPAND CONSUMER AUTHORITY FOOTWEAR: SUPPLY CHAIN GLOBALLY, DESIRE & ELEVATE WHILE ESTABLISH ORGANIZATION WITH FOCUS ON RELATIONSHIP EXPANDING OUR HANDBAG & PROCESS CHINA WITH
Slide 44: Stuart Weitzman Product & Geographic Breakdown
S T U A RT W E I T Z M A N P R O D U C T & G E O G R A P H I C B R E A K D OW N O P P O RT U N I T Y T O E X P A N D T H E B R A N D I N T E R N AT I O N A L LY A N D A C R O S S C AT E G O R I E S HANDBAGS & OTHER 2% INTERNATIONAL 36% FOOTWEAR NORTH AMERICA 98% 64% As of FY18. Product breakdown pen
Slide 45: Financial
financial
Slide 46: Fiscal 2019 Outlook
FISCAL 2019 OUTLOOK FOCUS ON execution revenue low-to-mid single digit growth revenue earnings per $2.55 to $2.60 diluted share We are focused on harnessing the power of our multi-brand model, unlocking the full potential of the strategic investments, to drive a return to double-digit operating inco
Slide 47: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES MAINTAINING A STRONG AND FLEXIBLE BALANCE SHEET 1 Invest in our brands and business 2 Acquire new brands on a strategic and opportunistic basis 3 Return capital to shareholders, with a focus on dividends 47
Slide 48: Corporate Responsibility
corporate RESPONSIBILITY
Slide 49: Corporate Social Responsibility: three strategic pillars
CORPORATE SOCIAL RESPONSIBILITY OUR PROGRAM IS FOCUSED ON THREE strategic pillars 1 2 3 ENVIRONMENT and COMMUNITY EMPLOYEE SUPPLY CHAIN ENGAGEMENT EMPOWERMENT • Corporate Governance • The Coach and Kate Spade • Employee Development Foundations • Global Business Integrity • Inclusion & Diversity Prog
Slide 50: Environment & Supply Chain
CORPORATE SOCIAL RESPONSIBILITY 1 environment & supply chain we strive to Achieved a 13.4% absolute CO2e reduction across Coach brand operate in an corporate and store locations in fiscal 2017. ethical and Provided in-person compliance and anti-corruption training to responsible over 120 suppliers a
Slide 51: Community Engagement
CORPORATE SOCIAL RESPONSIBILITY 2 community engagement Donated over $48 million through The Coach Foundation since its inception in 2008, including $1.4 million in 2018 towards the we believe in placement of “Dream Directors” in high schools nationwide, as part of the brand’s Dream It Real initiativ
Slide 52: Employee Empowerment
CORPORATE SOCIAL RESPONSIBILITY 3 employee empowerment we are committed Expanded our maternity leave in 2018 in the United States. to helping our Donated approximately $500,000 in fiscal 2018 to organizations that our employees are passionate about through our matching gift employees grow programs.
Slide 53: CEO quote: a company employees love to work for
“We want Tapestry to be a company where employees love to work, great brands aspire to be part of and investors believe in.” VICTOR LUIS, CEO 53 53
Slide 54: Appendix
APPENDIX
Slide 55: Non-GAAP financial measures notes
The Company reports information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The Company's management does not, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in a
Slide 56: GAAP to Non-GAAP Reconciliation: Quarters
GAAP TO NON-GAAP RECONCILIATION FOR THE QUARTERS ENDED DECEMBER 29, 2018 AND DECEMBER 30, 2017 GAAP BASIS ERP INTEGRATION & IMPACT OF TAX NON-GAAP BASIS (in millions, except per share data) (AS REPORTED) IMPLEMENTATION(1) ACQUISITION(2) LEGISLATION(3) (EXCLUDING ITEMS) Gross profit $1,203.5 $— $ (3.
Slide 57: GAAP to Non-GAAP Reconciliation: Six Months
GAAP TO NON-GAAP RECONCILIATION FOR THE SIX MONTHS ENDED DECEMBER 29, 2018 AND DECEMBER 30, 2017 GAAP BASIS ERP INTEGRATION & IMPACT OF TAX NON-GAAP BASIS (in millions, except per share data) (AS REPORTED) IMPLEMENTATION(1) ACQUISITION(2) LEGISLATION(3) (EXCLUDING ITEMS) Gross profit $2,138.6 $— $ (
Slide 58: GAAP to Non-GAAP Reconciliation: Years
GAAP TO NON-GAAP RECONCILIATION FOR THE YEARS ENDED JUNE 30, 2018 AND JULY 1, 2017 GAAP BASIS OPERATIONAL INTEGRATION & IMPACT OF TAX NON-GAAP BASIS (in millions, except per share data) (AS REPORTED) EFFICIENCY PLAN(1) ACQUISITION(2) LEGISLATION(3) (EXCLUDING ITEMS) Gross profit $ 3,848.5 $— $ (116.
Slide 59: Tapestry
tapestry COACH | kate spade | STUART WEITZMAN